For Lehman, Disorder Is The Rule

Want to see how fast things are moving? Why Dick Fuldprobably has the feeling that events are spinning out of his control? Mike Mayo is one of the senior bank analysts on Wall Street. Sunday night the Deutsche Bank analyst had a Buy on Lehmanwith a $32 price target.

Monday, he reiterated the Buy, noting the Fannie/Freddietakeover could be good for Lehman, but lowered the price target to $28.

Wednesday, with the stock cut in half, he maintained a Buy.

Today, he threw in the towel, lowering the price target to $11 from $28 and cutting the rating to Hold.

He wasn't the only one, other analysts have dramatically dropped their numbers in the last day. A big issue was Moody's, which late yesterday warned the bank that actions they were taking might be insufficient to avoid a ratings downgrade of their debt.

A downgrade would force Lehman to post additional collateral and limit transactions with partners that require a certain credit rating to be maintained. In other words, it could be the death knell for them.

So this is where we stand : Lehman wants and needs an orderly sale of assets, and an orderly capital raise. They are getting neither. Instead, disorder is the rule, which creates speculation that a fire sale of Neuberger may occur at levels far below what they consider fair value, or what they need.